Bsa cip program

Nothing in the CIP rule relieves a bank of its obligation to comply with any other provision of the BSA, including provisions concerning information that must be obtained, verified, or maintained in connection with any account or transaction.

Therefore, a bank may arrange for a third party, such as a car dealer or mortgage broker, acting as its agent in connection with a loan, to verify the identity of its customer. The bank can also arrange for a third party to maintain its records. However, as with other responsibilities performed by a third party, the bank is ultimately responsible for compliance with the requirements of the CIP rule. The U. Specifically, this section covers: 12 CFR Identity Verification Procedures The CIP must include risk-based procedures for verifying the identity of each customer to the extent reasonable and practicable.

The types of identifying information available. A product or service where a formal banking relationship is not established with a person, such as check-cashing, wire transfer, or sale of a check or money order; An account that the bank acquires through an acquisition, merger, purchase of assets, or assumption of liabilities; or An account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of Customer Information Required The CIP must contain account-opening procedures detailing the identifying information to obtain from each customer.

At a minimum, the bank must obtain the following identifying information from each customer before opening the account: Name, Date of birth for an individual, Address, 14 31 CFR For an individual: a residential or business street address, or if the individual does not have such an address, an Army Post Office APO or Fleet Post Office FPO box number, or the residential or business street address of next of kin or of another contact individual.

An identification number for a non-U. When opening an account for a foreign business or enterprise that does not have an identification number, the bank must request alternative government-issued documentation certifying the existence of the business or enterprise.

The exception permits the bank to open an account for a customer who has applied for a TIN, but does not yet have a TIN. For a credit card account, the bank may also obtain CIP identifying information about the customer by acquiring it from a third-party source prior to extending credit to the customer. Any document that was relied on to verify identity, noting the type of document, any identification number contained in the document, the place of issuance, and, if any, the date of issuance and expiration date; The methods and the results of any measures undertaken to verify the identity of the customer using non-documentary methods or additional verification procedures for certain customers; and The resolution of any substantive discrepancy discovered when verifying the identifying information obtained.

Comparison with Government Lists The CIP must include procedures for determining whether the customer appears on any list of known or suspected terrorists or terrorist organizations issued by any federal government agency and designated as such by Treasury in consultation with the federal functional regulators.

To do this, you will have to produce a current government-issued identification that shows:. Many new accounts are opened online or by mail or phone. The CIP Rules recognize that many new accounts are opened when customers do not appear in person at the bank or other financial institution. The CIP Rules favor an identity procedure based on documents, but they realize that it is not always possible to have document verification.

The Rules say that financial institutions should incorporate such situations into written procedures. Customer Identification Programs for Financial Transactions. CIPs must be established by a broad category of companies that fall under the BSA's definition of financial institution including: Banks and credit unions Investment companies Brokers and dealers in securities Insurance companies Travel agents Pawnbrokers Dealers in precious metals Check cashing companies Casinos Will I receive notice about identity requirements before I open an account?

What does the CIP Rule require financial institutions to do? Four data items are required for all new accounts. The CIP Rule requires an identification number. What is my number? These minimum requirements help ensure that even smaller financial institutions can incorporate a CIP that is appropriate for its size and the types of transactions with which it deals, and to fully meet federal CIP regulations.

Each financial institution has to consider their own characteristics — their customer base and their product offerings — in order to product a list of risk-based procedures that is both reasonable and practical.

These procedures need to consider:. The identification number for a non-U. Financial institutions need to have procedures in place on how to verify the identity information collected on each customer. Verification procedures should be done within a reasonable amount of time from the opening of the account. The procedures should allow the financial institution to verify enough of the identity information that a reasonable belief can be formed about the true identity of a customer.

In other words, customer identity verification procedures are not required to verify each and every piece of identity information collected — the only requirement is to check as much identity information as needed to establish the reasonable belief. The procedures can use either documents, non-documentary methods, or a combination of both to verify identities.

In such incidents, financial institutions need to have procedures in place in order to know how to respond. These procedures need to be established for the following situations:. A record of all information collected on a customer needs to be maintained and retained for at least five years after the closing of the account.

The following is the information that is needed to be collected for the record:. The purpose of comparing customer identity data with government lists is to determine whether or not the customer is on a government list as a known or suspected terrorist or a member of a terrorist organization.